House Passes Expedited Credit-Card Reform Bill U.S. House of Representatives The U.S. House of Representatives recently approved the NSBA-supported Expedited CARD Reform for Consumers Act of 2009 (H.R. 3639). The legislation—which passed 331-92—would expedite the effective date for the provisions passed under the Credit Card Accountability Responsibility and Disclosure Act (the “CARD Act”), P.L. 111-24 from Feb. 22, 2010.
Although the original bill contained an expedited Dec. 1, 2009 implementation date, the House approved an amendment by Rep. Dan Maffei (D-N.Y.) that would make the rules immediately effective once the bill was signed into law. NSBA President Todd McCracken testified Oct. 8 before the U.S. House Committee on Financial Services in support of H.R. 3639, which was introduced by Reps. Carolyn Maloney (D-N.Y.), chair of the Joint Economic Committee, and Reps. Barney Frank (D-Mass.), chair of the U.S. House Committee on Financial Services.
The House also approved—427-0—an amendment offered by Reps. Carolyn McCarthy (D-N.Y.) and Betsy Markey (D-Colo.) that would exempt issuers from the expedited enactment date if they froze rates and fees. The legislation also exempts small banks and credit unions from the accelerated enactment date, if those firms issued fewer than two million cards. With the top six issuers in control more than 80 percent of the market, only 10 percent of the cards in circulation would be affected.
U.S. Senate The McCarthy-Markey amendment is similar to legislation introduced Oct. 26 by Sen. Christopher Dodd (D-Conn.), chair of the Senate Committee on Banking, Housing, and Urban Affairs and sponsor of the CARD Act. Dodd’s legislation immediately would freeze interest rates on existing balances until the remaining provisions in the CARD Act go into effect.
This bill would end those abuses and further protect customers today. In addition to freezing credit cards’ current interest rates, the bill would require issuers to review any accounts that experienced an interest-rate increase since Jan. 1, 2009 and reduce rates where warranted.
While the Dodd bill has been placed on the Senate calendar, it is unclear when it might be considered. Although Dodd has stressed that he would push for floor time, he has acknowledged that it would be difficult to secure, saying “It's just now between Veterans Day and Thanksgiving is getting jammed… We're trying to find a window. And the leadership obviously has got a lot on its plate.”
As America’s entrepreneurs continue to be hammered by ever-escalating interest rates, NSBA urges the Senate to clear its plate for this critical small-business legislation. |